Mental Health Rift Brings Calley To The Table

Tension flares over workgroup reports, procedures

Tensions flared several weeks ago between mental health advocates and state officials over how to proceed in developing a crucial report to the Michigan Legislature on how best to fund $2.4 billion in Medicaid behavioral health dollars and integrate physical and mental health services.

Like earlier this year, when Gov. Rick Snyder’s proposed 2017 budget included boilerplate language to transfer funding management to the state’s health plans from the public mental health system, Lt. Gov. Brian Calley was called on to referee the dispute.

At the heart of the controversy is $2.4 billion in Medicaid funding that currently is disbursed to behavioral, mental and substance abuse providers through 10 regional and nonprofit prepaid inpatient health plans. Medicaid health plans, most of which are for-profit HMOs, want to take over the funding stream to integrate physical health with mental health. Opponents, who include mental health executives, providers and families, believe the current system can be improved to integrate physical and behavioral care.

A 120-member group known as the Stakeholder Section 298 Workgroup spent three months developing policy recommendations for the Legislature. The group’s report was completed in July and turned over to the state Department of Health and Human Services, which then was mandated by the Legislature to develop the final report with ongoing stakeholder input.

Mental health advocates are particularly concerned because one of the key recommendations approved overwhelmingly by the Section 298 workgroup is that Medicaid behavioral health funding should continue to be managed by the public mental health system.

Calley told Crain’s he did not attend a July 29 meeting called by HHS to explain the next steps in the legislative report preparation to a small gathering of mental health, hospital, insurance and health plan representatives. HHS officials explained that three new workgroups would be formed to write the final policy recommendations.

But Calley said he quickly responded with phone calls and emails to state officials when he received an Aug. 5 letter from eight mental health advocacy groups expressing concern that the Section 298 Workgroup’s report might be ignored by the next three workgroups. HHS and legislative budget chiefs also received the letter.

In the letter, the advocacy groups said it “was unsettling to learn that the next steps would not pick up from where the 298 workgroup ended.” They told Calley that HHS officials repeatedly said the next three workgroups would take an “unbiased” look at developing policy recommendations for the Legislature. They also said the 18 main core values and 29 design elements that should be included in a redesigned mental health and physician health system that were developed and overwhelmingly supported by the 298 workgroup “would be subject to interpretation” by the next three workgroups as part of the process.

HHS is required to file a report to the Legislature by Jan. 15 on reforming how Medicaid mental health funding is distributed within the state’s mostly nonprofit behavioral health system and how to “implement behavioral and physical health service integration.”

Elizabeth Hertel, HHS’ policy and legislative director, said the department plans to complete the draft report in October and then distribute it for public comment. She said mental health advocates “misinterpreted” HHS’ plan to develop the report.

“My first reaction (about the letter) was there was probably some kind of communication misunderstanding,” Calley said. “This was the reason I want to stay closely engaged in this to keep in close contact with everybody. I made it clear that the values and framework and vision is non-negotiable. (The Section 298) workgroup is the framework we will be using going forward. I reiterated that with the department.”

Elmer Cerano, executive director of the Michigan Protection & Advocacy Service Inc., said state officials told the group in the July 29 meeting that three new workgroups will develop the policy recommendations for the Legislature.

“(We) asked if the new groups will pick up where the last group left off,” said Cerano, who attended the meeting. “We were told we don’t want to be biased by it, that there would be a new approach. We asked about the core values and design recommendations and were told that would be up to this (new) group, too.”

Lynda Zeller, HHS’ deputy director of behavioral health, also told Crain’s there was a simple misunderstanding about how the three new state affinity workgroups were going to develop policy recommendations.

“Our intention is to build upon the work of the Section 298 workgroup,” Zeller said. “I really believe the group is moving together to strengthen the system … all physical health and mental health services.”

Dohn Hoyle, public policy director for The Arc of Michigan, said the mental health advocates met after the meeting and were in unanimous agreement that HHS meant it had decided to start the planning from square one.

“We were all quite alarmed, looked at each other and said, ‘We have to talk about this,’?” Hoyle said.

It was at that point that Cerano, Hoyle, Mark Reinstein and several other mental health leaders decided to involve Calley. Reinstein is a consultant and former director of the Mental Health Association in Michigan.

But Rick Murdock, executive director of the Michigan Association of Health Plans, who was present at the July 29 meeting, said his recollection was that HHS would use the 298 workgroup report.

“I am hearing there is a report with recommendations and that is the starting point” for the next three workgroups, Murdock said. “Clarification came out the next day (by HHS) that of course we are going to use the report. I was not concerned about the workgroup report not being used going forward. It is the best possible solution for the state.”

At the next meeting Aug. 12, Hertel said she confirmed with the group that the 298 workgroup recommendations “will be followed.”

Cerano said that meeting, after the letter and Calley’s intervention, was “totally different.” He said the state clarified that it would “follow what we did in the Section 298 group.”

Hoyle said he is happy HHS will consider the 298 workgroup’s recommendations, but he said he still has lingering concerns that HHS continues to favor the original Snyder boilerplate language that would have granted the health plans the $2.4 billion in Medicaid funds to manage the entire system.

“There was a vote (in the 298 workgroup) about whether the money should go through the health plans, and it was soundly rejected. There were a few votes from the health plan representatives,” Hoyle said. “We voted on having the money go through the community mental health organizations, and it was overwhelmingly approved.”

Calley said he knows there are hard feelings on the mental health advocacy side from earlier this year when the state’s original boilerplate language was inserted into the budget without warning or discussion.

“We have to be extra sensitive how well we communicate. The language and approach is a little different” between state officials and mental health advocates, he said. “I felt the department had reflected quickly and adjusted quickly to those concerns.”

Calley said he still hasn’t formed an opinion on how the Medicaid mental health funding should be handled — either through the HMOs or through the prepaid inpatient health plans. The PIHPs receive state mental health funding, manage provider networks and distribute payments to the community health agencies and providers.

“I do think it is important to allow for innovation in different parts of the state,” Calley said.

Cerano said he also hopes HHS recommends setting up various regional pilot projects to test how physical and mental health can be integrated to deliver more services to the public at lower costs.

“The bottom line is we want a re-envisioned system with self-determination and person-centered planning,” Cerano said. “We still have concerns how this actually gets done. There is an undercurrent that the private system wants to take over the public system and cherry-pick clients to skim off the profits.”

Hertel said the next meeting of the workgroup will be Aug. 26. Participants will appoint members to serve on the three workgroups — eligibility, payers and providers — that will develop concrete policy recommendations.